Medigap (Medicare Supplement) Insurance Plans

Medicare Supplement Insurance Plans

Medicare Supplement plans have been in existence since shortly after the introduction of Medicare in the 1960s. Original Medicare pays for much, but not all, of the cost for covered healthcare services and supplies. Medicare Supplement insurance policies, sold by private companies, can help pay some of the remaining healthcare costs for covered services and supplies, like copayments, coinsurance, and deductibles. Medicare Supplement insurance policies are also called “Medigap” policies. Medicare Supplement plans always pay after Medicare does (Medicare will pay its portion of the healthcare claim first, and the Medicare Supplement will pay second). Some Medigap policies also offer coverage for services that Original Medicare doesn’t cover, like medical care when you travel outside the U.S. Generally, Medigap policies don’t cover long-term care (like care in a nursing home), vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

Medicare Supplement Insurance Plan Facts

  • You must have Medicare Part A & Medicare Part B and continue to pay the Part B premium.
  • Plan designs range from A through N, and these plan designs are standardized – meaning they must be exactly the same in terms of coverage, only the premium may vary.
  • Unless you are new to Medicare, Medigap plans may require health statement underwriting (medical questions).
  • Medicare Part D Prescription Drug coverage is not included in plans sold after January 1, 2006.
  • Medicare pays first for Medicare-eligible benefits – then the Medicare Supplement pays next for some or all of the patient’s portion.
  • Medicare Supplement plans may also include some benefits not covered by Original Medicare (e.g., foreign travel coverage, with some limitations).
  • A Medigap policy only covers one person. Spouses must buy separate policies.
  • Some states limit Medigap premium costs and provide special rights to buy a Medigap policy.

Medicare Supplement Insurance Basics

How do Medicare Supplement insurance plans work?

Medicare Supplement (also called Medigap) plans help cover medical costs Original Medicare doesn’t cover, including elements of Medicare Part A and Medicare Part B. You pay the private insurance company a monthly premium for your Medigap policy in addition to your monthly Part B premium that you pay to Medicare, then the Medigap policy pays for things like Part A and Part B deductibles. This Medigap premium can vary widely. One might, for example be $75 per month while another could be $250 per month. The price will vary depending on the plan design (A-N), location/area the plan covers, how the plan is rated for your age (some increase costs over time as you age, others are set), and generally which insurance company offers the plan.

Buying a Medicare Supplement plan

The best time to buy a Medigap policy is during your Medigap Open Enrollment Period. This 6-month period begins on the first day of the month in which you’re 65 or older and enrolled in Medicare Part B (some states have additional Open Enrollment Periods). After this enrollment period, you may not be able to buy a Medigap policy. If you’re able to buy one, it may cost more. In some states, you may be able to buy another type of Medigap policy called Medicare SELECT. If you buy a Medicare SELECT policy, you have rights to change your mind within 12 months and switch to a standard Medigap policy. Also, if you join a Medigap policy and a Medicare Part D Prescription Drug plan offered by the same company, you may need to make 2 separate premium payments for your coverage.

Standardized Medigap Plans

The federal government has authorized 10 different Medicare Supplement plan designs, named with letters from “A” to “N.” Please be advised, these letters have no relationship to the Medicare Part A, B, C, and D designations. All Medicare Supplement policies with the same letter offer the same benefits, regardless of insurance company. This chart shows the standard benefits for each plan type:

Medicare Supplement Insurance (Medigap) Plans

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